Reputation in Relationships: Measuring Experiences, Emotions and Behaviors

This paper answers the call for more theoretical development and more rigorous and practical measurement tools that can be readily applied by management. On a conceptual level, it contributes to current research by defining reputation in terms of the perceived experiences of stakeholders and their emotions, while the consequences of reputation are defined as the behavioral support of stakeholders towards the business. Empirically, this is achieved by testing the Model of Business Relationships proposed by MacMillan et al. (2000). Data from customers of a financial institution are presented and analyzed using multivariate techniques such as structural equation modeling (SEM). The instrument to measure reputation is found to be both statistically valid and reliable. The data provides support for the model and its predictive power. The analysis also identifies specific causal links and demonstrates how the model can be tailored to a specific context. On a practical level, it offers managers a tool for understanding and influencing reputation in a systematic manner by identifying the causes of reputation in stakeholder experiences of organizations and the consequences of reputation as stakeholders' intended future behaviors towards the organization.

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